Environmental, Social, and Governance (ESG) reporting and your HR Strategy.

As an HR leader, you don’t wait till the board asks you before you design, develop and incorporate an ESG strategy into your people agenda. As such, HR leaders in emerging markets must step up and embrace a proactive, strategic role.

As the guardians of organizational culture and employee engagement, HR professionals are uniquely positioned to influence how companies address ESG challenges and opportunities for future business growth.

Nowadays, employees are purpose-driven. They want to work for organizations whose mission is more than leveraging the balance sheet. Stakeholders are more demanding of impact, input, and transparency. As an HR leader and a Governance, Risk and Compliance professional, I have seen a building congruence around the expectations of boards to the CEOs and their leadership teams.

While the war for talent remains, HR leaders and CEOs must help other leadership team members and their businesses to understand;

· ? ? ? ? What kind of talent do we need to support our business sustainably?

· ? ? ? ? Are our people practices, processes, and tools effective?

· ? ? ? ? How are we leveraging our systems to ensure employee wellbeing?

· ? ? ? ? What kind of impact do we want to have for business and stakeholders?

· ? ? ? ? How are we creating long-term value and running our businesses ethically with minimal risk?

Oftentimes, we have to begin from the ‘’why’’ of work in itself.

Emerging Market HR leaders must prepare their HR strategies with a keen focus on ESG. The actions delivered from an ESG perspective going forward should include:

Integrating Real-Time Data Analytics: Implement dynamic dashboards for real-time insights.

Adopting Narrative-Driven Reporting: Use storytelling to highlight the human impact of ESG initiatives.

Analyzing Intersectionality Metrics: Go beyond basic demographic data for a nuanced understanding of equity. Including pay equity - Gender parity.

Incorporating Stakeholder Feedback: Regularly solicit feedback to identify gaps in ESG efforts.

Fostering Cross-Department Collaboration: Ensure a unified approach to ESG reporting across all departments. Promoting Transparent Reporting: Communicate progress towards ESG goals to build trust and demonstrate accountability.

Here’s a deep dive into the essential HR reports for ESG, the radical enhancements needed, and the practical steps HR should take to support these strategies.

Key HR Reports for ESG Diversity, Equity, and Inclusion (DEI) Metrics:

Track Demographic Data: Monitor demographic data across all levels of the organization. In South Africa, you are required to provide BBBEE reporting.

Report on Hiring Practices: Highlight progress towards equality by reporting on hiring practices, promotion rates, and retention statistics.

Employee Engagement and Wellbeing: Use surveys to gauge employee satisfaction, mental health, and overall wellbeing. Get the same done for your 3rd party employees through their employers also.

Report on key Initiatives: Share data on initiatives aimed at improving work-life balance and mental health resources. Including Waste and energy consumption. Printing preservation. Effective meetings.

Health and Safety Compliance: Document Incidents: Keep records of incidents, safety training participation rates, and compliance with health regulations.

Highlight Improvements: Showcase improvements in workplace safety measures. Show where you have gone above and beyond.

Workforce Development and Labor Practices.

Provide Data on Training: Share information on training programs, skill development initiatives, sustainability training and career progression opportunities.

Analyze Impact: Evaluate the impact of training, development and interventions on employee performance and retention.

Report on Working Conditions: Include data on working conditions, hours worked, pay equity, and compliance with labor laws. Labour practices as well as human rights metrics.

Include Turnover Rates: Report on employee turnover rates and reasons for departure including attrition.

Document Social Responsibility Initiatives:

Outline Community Engagement: Detail community engagement efforts, charitable contributions, and volunteer programs.

Report on Impact: Highlight the impact of these initiatives on employee morale and brand reputation.

To truly stand out in ESG reporting, businesses in emerging markets should consider integrating the following practical elements:

Provide Real-Time Data Analytics: Leverage Dynamic Dashboards: Shift from static reports to dynamic dashboards that provide real-time insights into workforce metrics. This allows for immediate action based on current data trends rather than historical snapshots. It also helps you see trends as you look through the reports over time.

Get really good at Storytelling in the most transparent way: Move beyond numbers by incorporating storytelling that illustrates the human impact of ESG initiatives. Share testimonials from real-life employees about how DEI efforts have changed their work experience or community involvement stories that highlight corporate social responsibility. Let them tell the stories from their perspective. Also, important to share your struggles.

Provide Intersectionality Metrics:

Go deeper than basic demographic data by analyzing how various identities (gender, race, disability) intersect within the workforce. This approach will provide a more nuanced understanding of equity within the organization.

Integrate Stakeholder Feedback:

Regularly solicit feedback from employees regarding ESG initiatives through anonymous surveys or focus groups. This can help identify gaps in perception versus reality in ESG efforts.

How HR Supports ESG Strategies

HR is pivotal in shaping an organization's ESG narrative through several key actions:

How it collects and analyses data.

HR is uniquely positioned to gather comprehensive data related to employee demographics, engagement levels, and retention rates. Using people analytics can uncover trends that inform ESG strategies.

How it develops working policies that align with ESG Goals: Create policies that align with ESG goals—such as flexible work arrangements to reduce carbon footprints or diversity hiring practices to foster inclusivity.

How it delivers organization-wide training and awareness. Not just compliance. Sustainability Training: Implement training sessions focused on sustainable business practices and ethical behavior to ensure all employees understand their role in achieving ESG objectives.

Deliver Cross-Department Collaboration: Work closely with finance, legal, sustainability teams, and other departments to ensure a unified approach to ESG reporting. This collaboration enhances data accuracy and aligns goals across the organization.

Transparent Reporting: Build Trust: Regularly communicate progress towards ESG goals internally and externally. Transparency builds trust with stakeholders and demonstrates accountability.

Practical Steps for HR Leaders

Stay Informed on Regulations: Compliance: Keep abreast of evolving ESG regulations to ensure compliance and adapt reporting practices accordingly.

Understand the rights and the license to operate and how your people practices deliver these rights for the business.

Conduct Regular Surveys: Seek Employee Feedback: Implement ongoing employee feedback mechanisms to assess perceptions of workplace culture related to ESG initiatives.

Engage Third-Party Evaluators:

Build Credibility: Collaborate with external assessors for independent verification of ESG data, enhancing credibility.

Monitor Progress Continuously:

KPIs: Establish KPIs related to ESG goals and regularly review them to identify areas for improvement.

Think long-term and mid-term. Remember the results are not always immediate. it takes years of toil and practice to see the rippling effect.

Finally, Foster a Culture of Sustainability through Employee Participation: Encourage employees at all levels to participate in sustainability initiatives through recognition programs or sustainability committees.

To embed these practices into your operations, HR leaders must fulfill regulatory requirements and drive meaningful change within their organizations—it is only afterwards that you can position yourself as an essential player in the broader corporate sustainability narrative.

Bukola is an HR leader with deep ESG expertise, she advises CEOs and Boards on high impact, inclusive business environments using HR and ESG strategies that transform their businesses. She is a Certified Global HR and Talent Director, Governance, Risk and Compliance Professional and a Certified Diversity, Inclusion Executive. Want to know more about how to build a sustainable ESG-HR strategy? Apply to join the waiting list today. ??

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